What Happens in Vegas…
There was quite a bit of excitement heading into this year’s RECon convention. The event is, in many respects, the annual event for retail real estate professionals from around the country (and more recently from around the world). It seemed to have a little bit more industry buzz going for it than in recent years. I think the combination of some encouraging economic indicators and the feeling that the industry is on the cusp of what may be a more sustainable long-term recovery had everyone’s optimism in high gear. As mentioned in my column previously, I hadn’t felt this kind of pre-conference energy and optimism since 2007.
So did RECon deliver?
Well…honestly, I’m not quite sure how to feel about the conference. While there were—as always—lots of exciting people, projects, brands, ideas and energy, there’s a definite sense that somehow this year’s iteration didn’t quite live up to the lofty expectations that many of us had built up for it. I think one of the reasons is because attendance seemed a little softer than anticipated. That said, it’s fair to ask the question if attendance was really a little down, or if it just wasn’t as packed as we expected it to be. Another reason for the lower foot traffic might be that several of the biggest REITs, including names like Simon and Westfield, are still conducting their meetings off site. I think this contributed greatly to that “slightly less crowded” vibe we experienced.
It did seem to me that the general mood at the event was quite good, and the consensus appeared to be that the industry is moving in the right direction. Whether it is a meaningful barometer or not I don’t know, but I think it’s worth noting that the parties and social/networking events this year seemed to be a bit more festive and upscale than in recent years. Developers actually spent a bit more than I thought they would on that aspect of the convention.
As far as trends go, I think the international presence continues to be an important story. While it wasn’t quite as strong as I thought it would be, it was still up significantly over just a few years ago. Asian developers and consultants, including architects, market planners and leasing people, were present in force, and there seemed to be a solid Central and South America presence as well. Interestingly, there didn’t seem to be a strong European presence, but given the current economic uncertainties across the pond, that wasn’t all too surprising. The municipal presence was solid as expected. And, I thought it was a good logistical move to have their booths all together in a central location this year.
As for industry trends, it struck me that while the number of potential retail sites doesn’t seem to be up dramatically, the competition for sites seems pretty strong. It really is quite surprising to me how, despite an abundance of mixed-use chatter, relatively few developers are actively pursuing mixed use projects/locations. I hear a lot about how “the investment community won’t understand the project.” I think there could be a number of other reasons as well: there are fewer analogs, the projects tend to be more complex and require more sophisticated market research, design and leasing; and there’s some level of trepidation and uncertainty based on the lack of understanding. I think there are unrealized opportunities in that space, which I’ll talk more about in a future column.
What do you think? Was RECon all you expected it to be? What were your biggest takeaways? Please make a public comment below or feel free to e-mail me privately at [email protected].
Click here for past columns by Jeff Green.
Dollar General eyes Northeast expansion
PHILADELPHIA — Plans for a new distribution center near Philadelphia will allow Dollar General to more effectively replenish its rapidly expanding store base.
Dollar General said it planned to build a new 900,000-sq.-ft. distribution center on 109 acres in Bethel Township located near the intersection of I-78 and State Route 501 just west of Philadelphia. The company said it still needs to purchase the land and receive the necessary governmental permits and development approvals, but those requirements appear to be mere technicalities as construction is expected to begin this fall. Hiring would begin in the fall of 2013, according to the company.
The total cost for the facility, including equipment and fixtures, is expected to reach approximately $100 million. At full capacity, the facility will likely employ more than 500 people to serve more than 1,000 stores in the northeast. Additionally, Dollar General’s third-party transportation provider expects to employ 75 drivers.
(Click here for Retailing Today’s special report on Dollar General.)
Once open, the new facility will bring much needed distribution capacity to a company intent on growing its store base in the Northeast. Dollar General already operates 440 stores in Pennsylvania, but its closest DCs are located in Virginia, Ohio and Kentucky.
Announcement of the new DC, the company’s 12th such facility, follows the first quarter opening of new distribution centers in Alabama and a California. The increase in distribution capacity comes as Dollar General earlier this year opened its 10,000 store and has confirmed its view that the U.S. can support as many as 20,000 of its small format general stores that offer low prices on a broad assortment of food, consumables and general merchandise.
“This distribution center is an investment in the growth of our company, as well as the Commonwealth of Pennsylvania and Bethel Township,” said Rick Dreiling, chairman and CEO of Dollar General. “Dollar General opened its first store in the Keystone state in 1974, and we are proud to have contributed to its economic growth by creating jobs for nearly four decades.”
PacSun sees light in California-themed campaign
NEWPORT BEACH, Calif — Struggling specialty retailer PacSun is hoping a new campaign and some re-branding will help turn things around. To rebuild its image, the company has enlisted Juxt Interactive to create an immersive brand experience designed to coincide with the formal unveiling of the retailer’s new “Golden State of Mind” positioning, which includes the website GSOM.com, and is supposed to reflect the fluid, relaxed nature of the Golden State.
Designed specifically to fit the multi-screen lifestyle of 18-24 year olds, the GSOM site was built entirely in HTML5 and includes feeds from all of PacSun’s social media channels, unique content hosted by a regularly updated blog and seasonal photosets and photographers from the latest PacSun brand campaigns, as well as content from many of the apparel brands they carry.
The site takes the California theme even further by featuring posts PacSun brand ambassadors and digital correspondents, placed throughout the state and tasked with supplying a constant stream of content.
“Juxt really helped us achieve something online that is unlike anything we’ve ever seen before,” stated Greg Crawford, senior creative director for PacSun. “It’s an incredibly visual platform for extending the brand’s reach and bringing our amazing photography and images of California to the consumer. No matter where you’re sitting while viewing the site I think it’ll be an interesting, inspirational home base for anyone looking for places to go and things to see throughout the state, and what to wear while doing it.”
PacSun has a good deal riding on this campaign, as it needs to turn things around fast.
For its most recent quarter, the company reported a loss of $38.1 million, compared with a net loss of $35.2 million a year earlier. Sales dipped 1% to $234.2 million from $237.6 million, missing Wall Street’s expected revenue of $245.9 million.